FSA program assists beginning farmers

FSA has a special loan program to assist socially disadvantaged and beginning farmers in purchasing a farm.  Retiring farmers may use this program to transfer their land to future generations.

To qualify:

� The applicant must make cash down payment of at least 5 percent of the purchase price.

� The maximum loan amount does not exceed 45 percent of the least of (a) the purchase price of the farm or ranch to be acquired; (b) the appraised value of the farm or ranch to be acquired; or (c) $500,000) Note: This results in a maximum loan amount of $225,000).

� The term of the loan is 20 years.  The interest rate is 4 percent below the direct Farm Ownership Loan rate, but not lower than 1.5 percent.

The remaining balance may be obtained from a commercial lender or private party.  FSA can provide up to a 95 percent guarantee if financing is obtained from a commercial lender.  Participating lenders do not have to pay a guarantee fee

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